The Ramsey Show - App - Dealing With Family Drama Around an Inheritance (Hour 3)

Episode Date: February 25, 2022

George Kamel & Dr. John Delony discuss: How to handle the family drama that comes with an inheritance, Buying a house with cash, Taking the next right step financially. Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

🎵 Live from the headquarters of Ramsey Solutions, this is The Ramsey Show, where America hangs out to have a conversation about your life, your money, your mental health, your relationships, your career, everything that makes you a person. We're here to talk about it. I'm George Campbell, joined today by Dr. John Deloney. The phone number to call is 888-825-5225. All right, we're going to move on to Elizabeth in New Orleans, Louisiana. Elizabeth, welcome to the show. Hi. I have a question about some inherited money. Okay. When I was about two months old, I inherited some money from my grandpa who passed away.

And I was the first grandchild, and the way he set up his inheritance probably wasn't the best way. So I was the only grandchild to inherit money. That money was placed in a trust based on the instructions, but I couldn't touch it until I turned 35. I'm not 34. I have about a year until I turn 35. And I kind of have, you know, some questions about what potentially if I should try to gift some of that money to my cousins. There are six cousins that did not

receive any money. So yeah. How much are we talking about? So originally it was actually only $75,000, but that was 34 years ago, and it has turned into about $1.5 million. Wow. Talk about leaving a legacy. So, you said something I want to lean on. You said that it wasn't done very well. What do you mean by that? Well, I don't know what his intentions were. He actually died not relatively young. He was only 58 years old. So I'm not sure if he intended to, you know, I was only two months old. There was no other grandchildren at that time.

I would assume that I didn't have any relationship with him, that he would have wanted money to go to all his grandchildren and not just me oh that's a fascinating question I've never been asked this question so can I think it out loud as we answer it together absolutely so your granddad put 75,000 dollars in an account for his baby granddaughter and then he passed away prematurely, he passed away relatively young, right, at 58 years old. He's gone on to have

five other grandkids, or six other grandkids that conceivably would have also received a $75,000 account that he would have started for them. But he didn't. And so now you end up with one and a half million dollars and they all get nothing. Correct. Yeah. What does

your, that's a man. Number one, high five to you for even having the ethical courage and character to think this through. That's pretty cool. Um, what do your parents say about it, those who knew your granddad? So my dad, who was my granddad's son, he has actually passed away. Oh, my goodness. And so he was also, he was not very good with money. So he got a large inheritance, you, you know, which the, they're, they're four siblings. So the four siblings all got an equal inheritance. And my father like blew through all of his, and, you know, he passed away several years ago and his thought was like, you know, it's yours to do whatever you want with it. But I never But I never really agreed with the way he handled money to begin with.

My mother married to my dad. They're divorced. She thinks that I should give some sort of money to the cousins, and I somewhat agree with her, but navigating that, I'm not sure how to navigate it. So here's the way I would navigate this. I would come up with a number, let's say $100,000 or $150,000. That's a big number. Or $50,000. I would write that number down and I would write that number down, and I would let that be the number. And you need to know at the outset, anything less than what somebody thinks they should be getting,

they're going to complain about. They're going to be frustrated about. There will be somebody, one, two, five people who get money that will throw a fit. Just know that going into it, you can't make everybody happy. What you have to do in this situation is what you believe is the right thing to do. Ed, so you've sought wisdom from people who knew your granddad. Have you talked to an aunt or an uncle about it? I have talked to one of my aunts about it. So they're all kind of in different life places than I would say my family is.

So they all come from relatively wealthy families, I would guess, except for me because my dad just spent all the money at one point. He was really wealthy, but he spent it all. Sure. So her opinion is that the cousins would love it and everything, but they have a lot of money coming to them because most of them never spent. They got much more than $75,000. The other three siblings have barely ever touched their money.

They're all good to go. You and I would probably do this. I would probably, George, wait here. I'd probably, I'm like you. Just hitting me. If it's one of those cases where granddad looked at the other six cousins and was like, I'm not going to let them have my money. They're not going to be a good steward of this.

I'm making some judgments that I want my money to go just to you. That's one thing, right? This is a different thing, and I think you're trying to think through with character and with integrity, what would this have looked like? He was clearly a very generous man who did very well, who gave big lump sums to his kids, who wanted to take care of his grandkids, who was worried about his legacy. That seems to be the guy he is. And he also, for whatever reason, put a 35 age marker on this right right so

probably what i would do if i was you it's going to feel a little bit maternal and i don't care it's your money um i would set up an account and put 25 000 bucks or 50 000 bucks whatever number you think is right and i would put it in a trust that they can get to in their 35 and yeah let that be what it is because that that seems to be the only picture you have of what he wanted you to do. And then you take the rest of the money and don't lose a second of sleep over it. Give generously and follow the baby steps and you'll be good to go. Yeah, that's solid advice, Sean. The thing I keep thinking of, it's never going to be enough for any of the cousins.

They're going to go, well, it should be split equally because I'm just as much a cousin. There'll be one or two that go, wow, 100 grand, thank you. 50 grand, thank you so much. And those are going to be people that just want to complain and whine. Yeah. So you have no legal obligation to do any of this.

But like John's saying, I don't want you to lose sleep at night over this, so you do what feels right for you and know that you're not going to make everyone happy, if anyone. That's right. But man, what a legacy.

Thanks for the call. Appreciate that. This is The Ramsey Show. Most people know me as the guy who did stupid with a lot of zeros on the end. I made my first million dollars in my 20s the wrong way and then went bankrupt. That's when I set out to learn God's ways of managing money and developed the Ramsey Baby Steps. By following these steps, I became a millionaire again, and this time the right way. After three decades of guiding millions of others through the plan, the evidence is undeniable. If you follow the Baby Steps,

you will become a millionaire and get to live and give like no one else. My new book, Baby Steps Millionaires, is now available for purchase. When you order my new book, you'll learn how ordinary people built extraordinary wealth and how you can do it too. I'll walk you through how to invest, build wealth, and bust through the barriers preventing you from becoming a millionaire. Baby step your way to becoming a millionaire. Get your copy today at ramseysolutions.com. That's ramseysolutions.com. Hey, folks, welcome back to The Ramsey Show. I'm Ramsey personality George Campbell, joined today by Ramsey personality and bestselling author Dr. John Deloney. Now, John, all the rage among the youth and among this company is about your new book.

And I just got the advanced reader's copy, and it was like Christmas morning. Yeah, it was pretty intense. I didn't even know the advanced reader's copies were out down there until they whipped the big sheet off of them and the feeding frenzy began. I felt very special. Usually only high-profile folks in the media get this thing. You are high-profile. But I'm very excited to listen to it, and I also can't wait for the audiobooks. You can be piped into my ears while I look at the words.

I'm excited, man. You spent a lot of time, some would say too much time, pouring into this. You've really poured your life into it. This is not a book that was just in the last six months. This is decades and decades of foundation that you've built. So I just want you to talk about what is going on with this book. What are you hoping people get out of it? I'm hoping people who are having trouble sleeping, they wake up at 2 a.m.,

their eyes just pop open, and they're up for the rest of the night. And that happens night after night. Those who find themselves raged at an elementary school soccer game or a Little League game. The moms who, or dads who walk by the mirror and are just disgusted by what they see, or those who, like, I'm not going to ask for that promotion, or they don't get the promotion

and they're like, I quit, I'm out of here. We're all carrying around these stories and these bricks of just junk that has haunted us for years and years. Stuff that happened yesterday, stuff that happened 20 years ago. And it has a physiological context, man. years. Stuff that happened yesterday, stuff that happened 20 years ago. And it has a physiological context, man. It's consequences that

stuff that we were told, stuff we were born into, what church we went to when we were kids frames how we see God, right? Or the stuff our parents told us, our coaches told us frame how we interact with the world. And this isn't a talk at you book, but it's my own story too because I've lived this, right?

And it's me walking alongside folks. Think Dave's Total Money Makeover, right? He was bankrupt, and then here's his journey back. And a very similar story with me, except it wasn't financial bankruptcy. It was me falling apart, sitting in the mud one night saying, I need to do something different. So it's the journey about what's going on in our culture, in our world, and why we feel like this, and most importantly, what we can do about it. So I'm pretty excited about it.

Yeah, I'm really pumped. It's called Own Your Past, Change Your Future, and it is on pre-sale right now. And what I love about pre-sale is we throw a bunch of goodies at you to incentivize you. So you get the audio book, you get the e-book, and it's crazy what our friends at Better Help did. They said, hey, we want to give everyone a month of free therapy if they preorder this book. Because you might need it after reading it. Well, it's when you wake up on December 31st.

You're like, tomorrow I start my weightlifting journey. And you go downstairs and you don't have any weights, right? And all you have in your refrigerator is ice cream and the same old junk. I didn't want people to close this book and say, I'm starting right now. and all you have in your refrigerator is ice cream and the same old junk. I didn't want people to close this book and say, I'm starting right now. And then they call a local counselor or a marriage counselor or a therapist of some sort, and they get on a six-month waiting list. And, man, our friends at BetterHelp really stepped up to the plate and hit it out of the park.

And so they said, man, we believe in this book so much. We'll ride alongside you and give folks who listen a free month. That's a significant give on their part. Just so that people can close this book and say, it's time. Let's get going. And so I'm excited about it. Because it's the next step here. Absolutely. You've got to unpack some stuff.

Yeah, that's right. It takes working with a pro to do it the right way. Well, I'm pumped for you. For everybody who's bought this, the pre-sales, it's kind of blown all of our minds here. I think we all were excited about the book and I believe in it.

I think it's a great book. The sales have been bonkers and I'm really, from the bottom of my heart, it's touching. And so I'm grateful to all the Ramsey folks. I'm grateful that y'all

have reached out and bought this book like you have. And please continue to pick it up at pre-sale. It's fantastic. Well, thanks for all the heart and wisdom that you put into it.

I'm really excited about it. It's called Own Your Past, Change Your Future. It's $20, and you get way more value than that. So go get your copy. RamseySolutions.com is the place to do that. Ryan joins us up next. He's in Grand Rapids, Michigan. Ryan, welcome to The Ramsey Show.

Hey, guys. How's it going? Hey, great. How are you? Doing well. How can we help today? I have a question about a mortgage. So my wife and I are almost done paying off student loan debts. We got about $9,000 left. How far are you going? How far has your journey been? We started with, I think, about $120,000. Wow! Dude, you're a hero, man.

Keep going. You're almost there. That's incredible. Yeah, we've been really grinding it out. And that's kind of my question. So we're looking to buy a house once we finish paying off this debt. And I've kind of toyed around the idea of saving up to pay cash for it. And I'm just kind of wondering how realistic that might be.

And I feel like kind of the motivating factor behind this would be, I feel like we've worked so hard to get out of debt. I don't want to go back into debt again. You know, this being a better return, I guess, as a home versus student loans. But I don't know. I feel like we just got out of debt. I don't want to go right back into it. I just kind of want to hear your guys' opinion on that. Sure.

Well, first of all, it's an amazing and noble goal to even want to save up and pay cash for a home. But let me also tell you there's no shame in taking out a mortgage and getting a home and doing it the Ramsey way under the right parameters so this thing is a blessing and not a curse on your family. So it all comes down to how long is this going to take? What's your income? What kind of house are we talking? How much is it? So walk me through some of those numbers. Right. So we make about, it varies a little bit because I'm commissioned, but we make about $150 a year right now. Probably looking for a house. You know, we don't need anything crazy. We do have one kid on the way right now, our first child. So that's kind of a motivating factor as well.

But I'd probably say, you know, something between maybe the $150,000, $200,000 range. And that's realistic for the Grand Rapids area to get something that would be great for you guys? Yeah, that'd be great for us. You know, something, you know, two or three bedrooms, one bathroom, one and a half, somewhere around there, a little bit of land. We don't need anything crazy.

We don't necessarily know what will be in it forever. So it doesn't have to be the end-all, be-all for us. But kind of that's the plan right now. Cool. So how fast could you save up $150,000 once you're debt-free and you have a fully funded emergency fund of three to six months of expenses? Right. So right now we live off of just my wife's salary since she's salaried and on commission, and we live on probably maybe around like $36,000 a year.

She makes about $70,000. I make about $80,000 or $90,000. So I don't know after that how much we'd be able to save up, but I think we saved up over the past little less than a year about $60,000 that we put down on the student loans. Yeah. So I think it could be a two, two-and-a-half-year process saving up. Man, that's awesome. I mean, on that timeline, if that's what your goal is,

I'm not going to dissuade you against that. And at the end of the two-and-a-half years, if home prices went up a little bit and you guys have the money and you're ready to make that jump and you go, all right, we're going to take out a small mortgage in order to do this. We're going to pay it off really fast. There's no shame in that either. So there's no wrong way to do this other than taking out a mortgage that is way too big relative to your income. And that's very clear. You guys are not wanting to even step into that territory and ryan i'll tell you this um my student loan situation my wife and i have seven degrees between us is that right yeah we have a lot um yeah one two three four grad five graduate degree we have a lot too many we ended up at about where you were in student loan debt and i had that exact

same feeling the last thing on earth i'm gonna do after we just almost killed ourselves getting that thing paid off was to turn on and dump it into another thing and here's what it was it became less about the debt and more about safety i felt unsafe with that kind of debt and that's very similar to you had a little kid on the way all that very similar journey here's what helped me with that is taking out a big enough down payment, getting in so that I could get out of that house if I needed to, right? And I'm kind of a mini prepper.

George and I were just talking about that off air. It's about the safety. And so being able to save up, get that fully funded emergency fund, get a big enough down payment that you can get into that house and you can breathe. And I have found it personally, I don't like the debt. I'm treating it as though it is

credit card debt. We're paying it off as fast as we can. But I also am really, really glad that I got my own place right now. Okay. So I've been down that road. Do it the right way. Save up enough money of a down payment. Save up a fully funded emergency fund all the way to the top of that six months. And you're going to find yourself able to breathe. And, man, maybe it's a year that you put your $80,000 in an account, save it all up, and then go ahead and get that house. And then you've got a year or two on your mortgage left, and then knock it out. And you can do it in under two years because I don't want you to wait to invest for years and years and years. But if you're saying we can do this in under two years, man, that's incredible. And then you can

invest all the income you want, man. That's way to go. Dude, you're crushing it. This is The Ramsey Show. Thank you. Welcome back to The Ramsey Show. I'm George Camel, joined today by Dr. John Deloney. And on the debt-free stage in the lobby of Ramsey Solutions, it's Keith and Courtney. How are you guys doing? Doing great. Good. Guys, we met earlier. You didn't tell me you're from Lubbock.

Yeah. They don't want to tease it. They don't want any crazies like you. Wow. It's good to see somebody from the 806 out here in Nashville. All the way to do a debt-free scream. Yes, all the way. Fantastic.

It was a drive. Oh, you did the drive. Yes, I made that drive. Flights were canceled. We had no other option. And you still made it for the debt-free scream. Nothing was going to stop you guys. No way.

That's the kind of resilience that made them debt-free in the first place. Was it a big truck? No. No? A little Nissan. Yeah. Already bucking the trend, man. Very cool.

A little engine that could. All right. So how much debt did you guys pay off? $90,891.26. Wow. Not that we're counting every penny. You've memorized that. Okay. How long did this take? 26 cents. Wow. Not that we're counting every penny. You've memorized that. Okay, how long did this take?

14 months. Awesome. You guys got after it. What was the range of income during this time? A little over $100,000 to $140,000. Wow. Was this a raise? Did someone get a job?

What happened here? No, there was a pandemic, and I work in health care. So, worked a lot. We both donated plasma, anything that we could to get our income up. Wow. So what do you guys do for a living? I'm a pharmacy tech at a hospital. I work in chemo.

Wow. And I drive for Pepsi delivery. Awesome. Fantastic. Okay. So what type of debt was the $90,891.26? A little bit of everything. A couple of credit cards, furniture.

We paid off three vehicles. We had a $25,000 personal loan that we had taken out to get us out of debt completely. Wait, that doesn't work? I thought it was a life hack. Surprising, right? Life hack. I'll take out this debt to pay off that debt. For some reason, it didn't work for us.

One of those vehicles that we paid off was actually a fleece vehicle so we got rid of that and there was a Disney trip in there. Oh, finance on a credit card?

No. How'd you do it? Well, a little bit of both. Okay. Yeah. So we had booked it actually before

we started our process so I actually had two credit cards that were already in collections, and I had been to court and everything on them. That seems like a good time to then go, you know what we should do? We should go to Disney. Sounds right. You know, bad decisions were made, but now we're on a better track. So who had the conversation with who that said, this is a mess?

It was me, actually. Yeah. So, like I said, the pandemic. I work for a county hospital. And originally, in the beginning, they cut our hours. And I freaked out. Because in the beginning, it was a lot slower. So they cut my hours. And I panicked.

I thought, how are we going to do this? We are living paycheck to paycheck now. There's no way we're going to be able to do this on less hours. And y'all were making six figures in Lubbock, which goes a lot further than like in Nashville, and you're still paycheck to paycheck, right? Yeah.

We were stupid. Wow. I mean... Too much eating out. Yeah. So in August of 2020, everything had started to open up again. And we looked at our spending.

And eating out was the first thing that kind of caught my attention. We were starting to eat out a lot. And it was eating up so much of our budget. And so I asked Keith, I was like, why don't we challenge each other to not eat out at all the month of September? And just thinking of that, thinking how much that was going to save us. And then over that month of September, we made it through the month of September. But over that month, I started researching how to get us out of debt, that we made too much money to be this poor. There was no reason for that at all. And I had a cousin that

had actually followed Dave Ramsey and they were were debt-free, but I hadn't. She had talked about it, but I hadn't really listened to her much. So thankfully he follows me in anything that I want, which is both good and bad. That's a wise West Texas husband right there. So I approached him about, hey, let's start this and see what we can do, and we hit Gazelle from day one. So October 1st of 2020 is when we we started there

was a lot of ramen noodles and pb and j sandwiches and like i said yeah wow can i ask you this um i hear families that make a concerted effort like y'all did let's stop eating out start making food at home that it has it has a centrifugal force that we're all in the kitchen cooking together, which means we're talking a little bit more, we're laughing a little bit more, and even husband picks up the dishes every once in a while, and the kids are around. It has this leavening effect that raises the whole family up, right? Did y'all experience something similar? Oh, yeah.

Yes. We have become so much closer in all of this that's awesome road trips we always listen to the podcast our eight-year-old is comes on and he's like oh dave again but he listens and he knows the music he knows the sound he every debt scream every scream he does it along logan we feel your pain though man we feel your pain it's like mom you're outing me on national radio we listen to dave's voice in the saxophones, too. He's the reason we're here. He wanted to do the screen.

Wow. So cool. He's been practicing. He's ready. Morris Coth and Todd. And that little guy, he saw you guys hustle and bust your butt to get out of this debt so that you could change your family tree. Yeah.

And I want to mention, Keith actually got hurt at work back over the summer and hasn't worked since October 21st. He has been on Workman's Comp. So we finished out our last two months on Workman Comp pay of just busting and doing whatever we needed to do to make it happen. We changed insurance companies, anything that we could do to save money and saved ourselves, saved our family in the process. You guys are heroes. Thank you so much for coming all this way so we could celebrate with you. So what do you tell another couple out there? What's the key to getting out of debt?

Working together. If you don't work together, you're never going to succeed. There was lots of compromise on both of our behalves, but we would sit down and do our budget together, and I'm a little obsessive. I carry my laptop everywhere with me, and if it goes the slightest bit off, we're adjusting that spreadsheet. But we do it together,

and it's made our family stronger because of that. We do it my way on my laptop, but we do it together. It's made our family stronger. We do it my way on my laptop, but we do it together. That's right. It's like he knows us. He doesn't get to touch the laptop, but he gets to look. We sit on my couch and we do this together. I love it. I love it. I love it. So did you guys have any cheerleaders? Anyone think you're crazy along

the way? Lots of both. Keith's parents have been awesome. They support us. They actually started their own journey, and they paid off a lot as well and became jet-free also. Like I said, my cousin, Elisha,

was a strong supporter. Co-workers, they all thought I was crazy working so much. I was working anywhere from 70 to 80 hours a week some weeks. And going down the street and selling blood on the way home, right? Hey, do what you got to do.

Good. We got ourselves in that hole. We had to get ourselves out. I love that attitude. I love it. Taking responsibility, and it got you here. And now you're making $140,000, and you get to keep every penny after Uncle Sam gets his cut. Exactly.

That's the way to do it. And we're less than 50 on our house. Wow. We'll see you soon, right? We'll see you in a few more months. Come back. That's awesome. Okay, so you brought Logan with you. Yes, Elijah couldn't make it today. Okay.

He's 22, had to stay home and work. He's got bills too. Oh, I get it. We'll bring him up here. How old's Logan? Logan is 8. 8. And clearly has been practicing. This guy knows this stuff better than me. He could do the show, probably. And if you want to know what a West Texas uniform looks like,

Logan and Dad are wearing it. Tucked in shirt. He wanted to wear the cowboy hat, too. So. When in Rome, brother. Hey, you look great, Logan. I love it.

Well, let's get to it. You guys have worked so hard to get to this point, and it's come down to the final moments. We've got a copy of Baby Steps Millionaires for you.

It's Dave's best-selling book, and it's the next chapter for you guys as you build wealth and give generously. And we're going to give you a copy of the Total Money Makeover so you can get someone else's journey started and get them gazelle intense. All right, here we go.

Keith and Courtney and 8-year-old Logan, $91,000 paid off in 14 months, making $100,000 to $140,000. Let's hear a debt-free scream. Count it down. Three, two, one. We're debt-free! Yes!

Oh, that is, that's what it's all about right there. It started with him going, Mom, turn this off. And it turned into him being on this stage, screaming at the top of his little lungs about debt freedom. Man, that kid is never going to know debt. I'll tell you that much, John. That's exactly right. A legacy left, a family tree changed.

It's so worth it. Adversity crisis, they overcame it all. Keith and Courtney and Logan can do it. And you can too, America. You could be on this stage. We'd love to see it. This is The Ramsey Show. សូវាប់ពីបានប់ពីបានប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពី Welcome back to The Ramsey Show. I'm George Campbell, joined today by Dr. John Deloney. Our scripture of the day comes from Proverbs 19.21.

Many plans are in a man's heart, but the counsel of the Lord will stand. John Lennon said, Life is what happens when you're busy making other plans. Which is a great circle back to living in the future, in the metaverse. No. That's right. Live now. Life is what happens when you are living in a virtual reality with fake friends.

In imaginary curtains. Classic John Lennon quote. Classic John Lennon.. Classic John Lennon. I love it. Let's go to the phones this hour. Dee joins us in Washington, D.C. Dee, welcome to the show. Thank you.

How are you? Doing great. How can we help? So I make about $60,000 a year. I have about 18 in savings, another 8 in retirement, but I have 75,000 in student loans. Yeah, I would really love to buy a home in the next three years, and I would love some financial guidance here. Most of what I've learned about managing my money has come from just my lessons and hits I've taken and Googling things. The School of Hard Knocks and Google, both great teachers.

Hey, so where do you get connected with our crazy crew? So I actually just stumbled across you guys by accident on YouTube. Nice. Our YouTube guys love to hear that. Well, I'm glad you found us. We're going to walk alongside you here and get this whole ship turned around for you, okay? Yes. So I love that you've got these goals to get a home, and that will come one day.

But right now, we've got a mess to clean up with these student loans. And so you've got some retirement going, which tells me you're investing right now, correct? That's right. How much are you investing every month? So coming out of my paycheck, maybe... Oh, sorry. I think we lost you there for a second, Dee. You still with us? Oh, yes. Okay. We're hearing some static. Oh, sorry about that. That's all right. I would say about $200 a month. $200 a month. Okay. And are you getting a tax refund or do you owe? I do get a tax refund when I file my taxes each year,

but my contributions are on a Roth basis, so they're all after tax. Okay. How much of a refund do you get? This year, not that much, about $250. Okay. All right. I'm just trying to figure out where we can find some money here for you. So our plan is countercultural.

It's different. It doesn't make sense on paper, but it works every time you work it. Every time, Dee. Here's where we start, which you already have. This is a great problem to have. You have $18,000 in savings. Baby step one, the very first step is to, obviously, we're going to make a budget, so that's separate. But baby step one, we want $1,000 put away in a

savings account. So you have that, but you also have $17,000 after that, don't you? And so baby step two is where we move on to the debt snowball. So we're going to list out all of your debts, every student loan. Is that all of your debt? Is the 75? Basically, I have 700 in credit card, but that's it. Okay. So that would probably go to the top of what we call the debt snowball, where you list them all from smallest to largest. We're ignoring interest rate because this isn't about math. This is about behavior change and progress and motivation. And we're going to start attacking that little one with a vengeance while making minimum payments on the rest. And so if you list them out, instead of looking like a $75,000 mountain, now it becomes, oh, I can see the 700 bucks. I can knock that out.

And then I've got a $2,000 loan. I'm going to knock that out. So you begin to feel the progress. You free up a payment. You can put that onto the next debt and the next debt and the snowball starts to roll. Does that make sense? Yeah. So by tomorrow, you only owe $58,000. That feels pretty good, doesn't it? Because you applied the $17,000 that you already have in savings. You just knocked out small debt, small debt, small debt, bigger debt, medium-sized debt, medium-sized debt, and now you're on your way. See what we just did there?

Yeah. And you should feel terrified. Because now you're going, I have $1,000 to my name. What are they trying to tell me to do? You are completely exposed. You are scared're going, I have $1,000 to my name. What are they trying to tell me to do? You are completely exposed. You are scared. And that's the whole point here. It's gazelle intensity.

You probably heard us say that. You are sprinting for your life. You're going to take an extra shift. You're going to get up early and deliver papers. And that's something we did in the 1800s before George was born. That's right. But you're going to run, run, run for the next six months, six to 12 months, and you're going to knock this thing out. And the other thing, D, that I would tell you to do is to pause investing. And again, that's going to hurt a little bit, right? Because

you're not going to see those investments grow. But remember, this is temporary, and we want you to feel the fire under your tail to get rid of this debt so you can get back to investing. And guess what? When you get back to investing, you're not going to be investing $200 a month. You're going to be investing 15% of your household income, which is way more than that. So you're going to make up for it on the back end. But once you get rid of all this consumer debt using the debt snowball, you're going to be in baby step three, which is where you get to some financial peace. You're going to build that emergency fund from $1,000 up to three to six months of expenses. And then we're going to invest 15% of our household income into retirement.

If you've got kids, we're going to put away some for college. We're going to begin to pay off the house. But you mentioned you want to buy a house. And so the step that would fall into is what we call baby step 3B. So once you have the fully funded emergency fund, man, now we have all of our income back at our disposal. That's our greatest wealth building tool, and you can begin to save up a down payment. I want you to save up 10% to 20% and do a 15-year fixed rate mortgage with a payment that's no more than a quarter of your take-home pay. Do you feel the progress already?

I'm excited for you. I'm terrified, actually. Hey, Dee, what do you do for a living? I work for the government. Okay. Is there opportunities? I know some government jobs are 24-7, 365. Are there opportunities for you to go work a shift

or deliver Uber Eats in the evenings? To work on Saturdays? Okay. I need you to hear us very clearly. This is going to be hard and you're going to be tired. And anybody selling you anything other than exhaustion and fatigue and grinding it out is lying to you and trying to take your money. Okay? This is hard.

And everyone around you will say, you make $60,000. What are you doing? What do you mean you can't go what are you doing what do you mean you can't go out to eat what do you mean you're bringing your lunch over to our house why are you being a weirdo because i want to sleep at night i don't want to wake up at 2 a.m and i can't breathe i don't want to see every government headline come out and i look at my account and say if i get furloughed i i'm going to default on it. You see what I'm saying? As a guy who just paid his house off, George, his entire cadence is lighter. He just walks through the world

a little bit lighter because he owes nobody anything. I'm a dangerous man with some money in my pocket. You're probably the least dangerous guy I know, George. Do you hear what we're saying, Dee? Do you hear what we're saying, John? Okay. Dee, do you hear what I'm saying? I hear you.

So here's what we're going to do. I'm going to give you, I want you to hang on the line, and we're going to give you a year of our flagship product, okay, Ramsey Plus. It's got the full-fledged app, the EveryDollar app. It's going to help you track all of your expenses. It's going to have all of the FPU classes taught by Dave and me and George and others in the product, and it's going to have all of the stuff in it. It's going to walk with you along.

And invite your friends over to watch it with you, man. You get a small little gang of you all do this together. Because it's going to be counterculture. It's going to be weird. But this is a big-time product, and I'm going to send it to you for free. But you've got to promise that you'll use it over the next year. Is that a deal?

That's a deal. All right. I'm proud of you. I'm so glad you're in our gang. Trust the process. Trust the process. And you're going to change everything. Hang on the line here. D, there's so many people out there who are just as terrified as you. And when you get around them and you guys start to share your wins and share what's working and you get excited, it changes everything. I'm more terrified about you sitting there with student loans for the next 20 years. $75,000.

And then you get a huge mortgage that you barely can afford. You're not sleeping at night. You've got 17 lenders to pay. You're living off of credit cards. That's a much more terrifying reality than one or two years of sacrifice, and then we're going to start working on this house, and we just need to adjust our expectations, give yourself a different picture of what the future looks like, and the bad news is

it's going to be longer than you think. The good news is it's going to be so much better than you could have ever imagined when you get there. That's an interesting thing to remember. It's going to be harder than you think, and it's going to feel 10x better than you think it's going to when you get there. It's worth it every time. You can ask anyone who's been on our debt-free stage. They'll tell you, I would do it all over again. Yeah. This is worth it. They glow.

They glow. They glow so good. You're going to get there, D. We're proud of you. Cheering you on. That puts this hour of the Ramsey Show in the books. My thanks to my awesome co-host, Dr. John Deloney, all the booth folk who keep the show afloat and running smoothly. And thanks to you, George, my good friend.

Thank you. Thank you for saying that, John. I'm acknowledging our friendship on the air. YouTube has been worried if me and John are on the fritz. We're doing great. We're doing great. All right. Hey, remember, folks, spend wisely, save intentionally, give generously.

That's what it's all about. This is The Ramsey Show. Hey, it's John Deloney, co-host of The Ramsey Show. Did you know over 18 million people listen to The Ramsey Show every week? A lot of those people listen on one of our 600-plus radio stations across the country. To find a station near you. you